Tianfeng Securities·2024-09-01 10:06Investment Rating - The investment rating for the company is "Buy" with a target price indicating a potential return of over 20% within the next six months [6][14]. Core Views - The company's performance in the first half of 2024 showed a slight decline, primarily due to pressure on investment banking operations, with adjusted revenue of 66 billion and 123 billion yuan for Q2 and the first half respectively, reflecting year-on-year decreases of 18.6% and 27.4% [1]. - The report highlights that while the investment banking and brokerage businesses faced significant challenges, asset management and credit businesses experienced positive growth, with asset management revenue increasing by 6.5% year-on-year [3][4]. - Regulatory changes and a contraction in market trading volumes have adversely affected the investment banking and brokerage sectors, with brokerage revenue down 13.6% and investment banking revenue down 42.2% in the first half of 2024 [2]. Summary by Sections Financial Performance - In Q2 2024, the company achieved an adjusted revenue of 66 billion yuan, with a net profit of 30 billion yuan, marking a year-on-year decline of 8.8% and 19.0% respectively [1]. - The return on equity (ROE) was reported at 6.4%, a decrease of 2.1 percentage points compared to the same period last year [1]. Business Segments - Brokerage business revenue for the first half of 2024 was 27.2 billion yuan, down 13.6% year-on-year, attributed to decreased trading activity in the capital markets [2]. - Investment banking revenue fell to 9.3 billion yuan, a significant drop of 42.2% year-on-year, largely due to regulatory changes impacting underwriting volumes [2]. - Asset management revenue increased to 22.2 billion yuan, reflecting a year-on-year growth of 6.5%, supported by the expansion of large asset management business scales [3]. Future Outlook - The report suggests that despite the current challenges in investment banking, the implementation of new policies may enhance market activity, potentially improving brokerage and margin financing revenues [4]. - The adjusted profit forecasts for 2024, 2025, and 2026 are 134 billion, 139 billion, and 156 billion yuan respectively, with expected year-on-year growth rates of 5.1%, 3.8%, and 11.9% [4].